IIFL Home Finance is looking to increase its green housing portfolio to Rs 5,000 crore in the next three years, from around Rs 2,000 crore now.
“We have set up a technical systems arm where we educate developers to make green projects. We are helping developers to build green projects and we then fund them,” CEO Monu Ratra said while acknowledging that not many projects in India are green certified.
Currently, the company’s sustainable housing portfolio constitutes less than 10% of the overall loan book. Around 70% of the portfolio comprises green mortgage, which are individual loans in green-certified projects. The remaining 30% comprises construction finance.
In August 2023, the International Finance Corporation (IFC) invested up to $100 million into IIFL Home Finance, and a part of this will be used to finance green housing for buyers in this underserved segment. “We have just started the self-construction portfolio in partnership with IFC. We will see it growing this year,” Ratra said.
Currently, IIFL Finance holds an 80% stake in the housing finance company while the remaining 20% is held by Abu Dhabi Investment Authority (ADIA).
The housing financier’s asset under management stands at around Rs 35,000 crore, with home loans constituting nearly 80% of the overall portfolio. It specifically focuses on the affordable category, where the ticket size is less than Rs 20 lakh. The branch count stands at 390.
“We have got all the products that we need to cater to affordable housing depending on the geography and target segment. We do not wish to add anymore products,” he said.
Going ahead, the home finance company expects its assets under management to grow by around 20-22% on an annual basis. It is planning to add 30-40 branches each year.
The company’s plans to maintain its return on assets at over 4% and increase return on equity to over 20% from 17%.
The company plans to borrow around Rs 12,000 crore in 2024-25(April-March) to meet its loan growth target. These borrowings will be a mix of non-convertible debentures, refinance and term loans.
